The 6th Cycle Housing Element process is a unique opportunity to plan to meet the full range of housing needs of all San Jose’s residents, protect vulnerable residents, preserve existing affordable homes, and remove constraints on housing development. “Everybody knows that we’re in a crisis,” said Mathew Reed, Director of Policy with SV@Home. “Everybody knows that we have been underperforming.” We are concerned that the Housing Element will require technical edits to clarify and strengthen programs enough to achieve both the desired impact and HCD certification.  We urge staff to incorporate these recommendations over the coming weeks to strengthen programs, improve the likelihood of substantive impact during the planning cycle, and meet HCD’s appropriately stringent standards.

By Ethan Varian | Bay Area News Group June 21, 2023, 11:36 am | Photo: Nhat V. Meyer/Bay Area News Group

To ease a deepening housing crisis, San Jose aims to add as many as 75,000 new homes over the next decade — potentially boosting the number of households in the Bay Area’s largest city by almost a quarter.

On Tuesday, the City Council took a crucial step toward realizing that ambitious goal by approving a state-mandated plan meant as a roadmap for its housing future.

But the move wasn’t without controversy. A host of pro-housing advocates, tenant activists and construction labor backers voiced a range of concerns over the plan. Many are skeptical the city can convince state regulators to sign off on the proposal, whose support San Jose officials need to finalize the plan.

“We’re hearing from a lot of people that this isn’t going to be certified because there’s substantial issues,” said Councilmember Sergio Jimenez during the meeting.

The state has made it clear it has high expectations for the plan, requiring the city to explain in detail its strategies for significantly ramping up homebuilding.

In the end, at the urging of city planning officials who insisted the proposal is sound, the council, in a tight 6-5 vote, agreed to send it to the state housing department.

Where does San Jose hope to add the tens of thousands of new apartments, condos and single-family homes?

In its 239-page “housing element” planning document, the city has identified around 600 potential development sites. Many are concentrated downtown and in the Diridon Station neighborhood, where Google plans to build its Downtown West mega-project.

Officials have also designated parcels across suburban areas, particularly along major transit arteries such as Stevens Creek and Winchester boulevards. North San Jose, which the city has for years targeted for development, could also see many more homes.

Additionally, the plan calls for more affordable housing in wealthier neighborhoods that have historically locked out lower-income residents. That includes parts of southwestern San Jose, notably along De Anza Boulevard bordering Cupertino.

The city is not going to build the new housing itself. Almost all of the construction would be done by private developers. But under state law, the city must specify where and how it can spur the development of at least 62,200 more homes — over half of them affordable — by 2031. That’s a 77% jump from its previous eight-year housing goal.

For the last eight-year cycle, San Jose, like many Bay Area cities, fell far short of hitting its affordable housing goals while meeting its market-rate target. The city approved only about 25% of its combined low- and middle-income goal of more than 20,800 units.

Local officials blame the slow progress in part on a severe lack of affordable housing subsidies. But housing advocates agree the city must work harder to address its chronic housing shortage.

“Everybody knows that we’re in a crisis,” said Mathew Reed, director of policy with the South Bay housing advocacy group SV@Home. “Everybody knows that we have been underperforming.”

In hopes of sparking more home construction this cycle, the state is demanding cities prove all housing sites identified in their plans have a realistic chance of development. Regulators are also requiring local governments to allow larger multifamily housing projects in some neighborhoods and come up with new programs to prevent housing discrimination and displacement, among a laundry list of other mandates.

At Tuesday’s meeting, which stretched late into the evening, advocacy groups argued San Jose’s plan doesn’t go far enough to meet those requirements or address a variety of other issues, from the viability of proposed development sites to eviction protections and construction labor standards.

Some cited letters to the council from city planning commission members accusing local planning officials of failing to inform residents about the plan.

“The lack of timely delivery and limited opportunity for public engagement has raised significant concerns about transparency, inclusion, and the integrity of the planning process in our community,” commissioners wrote in a June 15 letter.

But planning officials pleaded with the council to approve the plan immediately or risk facing penalties from the state.

Bay Area cities were supposed to have their housing plans finalized by Jan. 31. But San Jose, along with nearly every other city in the region, blew the deadline. And as long as local governments don’t have a state-approved plan, they’re at risk of missing out on affordable housing and transportation funding and losing control over the approval process for new homes.

So far, only about a quarter of the Bay Area’s 109 cities and counties have gotten the OK from regulators.

The delay also threatens to force San Jose to accept development proposals much larger than local zoning rules typically allow. That’s thanks to another state penalty known as the “builder’s remedy.” Developers are already invoking it in an attempt to push through at least 14 projects across the city, according to planning officials.

Now that the City Council has approved the proposal, the city could attempt to deny any future “builder’s remedy” proposals by arguing the plan is now in “substantial compliance.” But developers and housing advocates have maintained cities must continue accepting the proposals until they get final state approval. The issue could well end up in court.

“Our position is that after today’s action, the (“builder’s remedy”) door is closed,” said an attorney for the city during the meeting.